THEORIES OF MANAGEMENT

Lecturer – Ruth Njeri Thuo

 Learning Objectives
Explore and evaluate the different schools of
management theories

Understand the contributions of each theory

Develop knowledge of the evolution of

management theories and why it is important
to managers
 Pre-Industrial Revolution Influences
Ancient civilization encountered managerial challenges and
found ways to cope with them

China
Egypt
Roman Empire
Religion
 Industrial Revolution
Refers to the period during which a country develops an
industrial economy

Began in eighteenth century

Changes in technology
No common source of knowledge on management
Entrepreneurs and factory owners began looking at
best was to organise activities of factories and
directing people
Time Line of Theories of Management
 Theories of Management
There are 4 main theories of management are:

Classical

Human Relations

Systems

Contingency
 CLASSICAL THEORIES OF MANAGEMENT
 Focused on finding the “the one best way” to
perform and manage tasks

 Originated during the industrial revolution

 Classical management theory assumed a simple

stimulus-response relationship in the workplace

 Rational, scientific approach to management-

make organizations efficient operating machines
CLASSICAL THEORIES OF MANAGEMENT

3 major ‘sub-groupings’ of the classical approach

are:
1. Scientific management

2. Administrative management

3. Bureaucratic management
 SCIENTIFIC MANAGEMENT
 Frederick W. Taylor (1856 – 1915)

 Founder of Scientific Management

 One of the first people to study

the behavior and performance
of people at work

 To improve production efficiency, Taylor

tried to figure out the “one best way” to
perform a particular task
 SCIENTIFIC MANAGEMENT
When Taylor was working as an apprentice at
the Midvale steel company, he noticed that
most workers did not work as hard as they
could.

To increase efficiency, Taylor tried to figure out

the “one best way” to perform a particular task.

To do so, he used a stop watch to determine

which method was the most efficient. These
studies were known as “Time and Motion
Studies.”
 Scientific Management
Taylor’s Theory of Scientific Management argued the following:

 Jobs should be designed according to scientific rules rather

than rule of thumb methods.

 Employers should collate data and determine the one best

way of performing a task

 Employees should be selected according to scientific methods

 Train employees in the most efficient methods to perform job

 Scientific Management
 Provide Incentive. As a result workers are encouraged to work
hard and maximize their productivity.

 Principles of scientific management should be explained to

workers
 Scientific Management
 Taylors approach has close links with the concept of an
autocratic management style (managers take all the
decisions and simply give orders to those below them)

 McGregor's Theory X approach to workers (workers are

viewed as lazy and wish to avoid responsibility)

 However workers soon came to dislike Taylor’s

approach as they were only given boring, repetitive
tasks to carry out.
Examples of Organisations that apply
Scientific Management
 McDonalds
 Toyota
 Ford
 ADMINISTRATIVE MANAGEMENT
 Henri Fayol (1841 – 1925)

 Fayol was concerned with general

management and overall control of the
organization

 Fayol’s approach was analytical and

focused attention on the specific
functions of managers

 Fayol developed 14 administrative

principles for organizational
management. Effective guidelines to
improve organization’s performance
Administrative Management
 Concerned with managing the entire
organization

 A well defined hierarchy of authority

 Formal rules and procedures
 A clear division of labor
 Impersonality
 Careers based on merit
 BUREAUCRATIC MANAGEMENT

 Developed by a German Sociologist &

political economist Max Weber (1864-1920)

 According to him, bureaucracy is

the most efficient form of org.

 Advocated the necessity of formal

organization structures with set rules and
regulations

 Organisations need to have a well-defined

hierarchical structure with detailed authority.

 Decisions should not be based on personal

relationships and loyalty
Features of Bureaucratic Organization

1. Clear Division of Labour and Specialization.

2. Well defined Hierarchy of Authority.
3. Rules and Regulations are written down and clearly
stated
4. Interpersonal relations are based on positions and not
on personalities.
5. Selection and Promotion is based on technical
qualifications/ ability.
6. Salaries are tied to pay grade system
Criticism of Bureaucratic Organization

1. Too much emphasis on rules and regulations. Are rigid

and inflexible.
2. No importance is given to informal groups.
3. Bureaucracy involves a lot of paper work.
4. Bureaucracies are unable or unwilling to quickly adapt to
change
5. Micro-managing is common
6. RED TAPE

Bureaucratic model may be suitable for government

organizations. But it is not suitable for other businesses
because business organizations believe in quick decision
making and flexibility in procedures.
Examples of Bureaucratic organisations
Health service, Prisons

Police departments

Schools

Department of Motor Vehicles

 Lessons from Classical Scientific Thinkers
Contributions
 Provided a rational way to think about the structure and
management of organisations
 Provided directions for managers attempting to increase efficiency
and effectiveness

Criticisms
 Reduced the workers role to that of rigid adherence to methods
and procedures. Ignored their ideas
 Did not acknowledge differences among individuals
 Assumed there is “one best way” to manage business
 HUMAN RELATIONS APPROACH

 Elton Mayo - Australian Social Scientist

 Carried out at the Hawthorne experiment at the

Western Electric Company in Chicago, USA
between 1924 & 1932 by Mayo & Co-workers.

 Considered the best known & most

widely quoted piece of social research

 Initial studies were to determine the effects of

changes in lighting (environment), on
productivity
 Hawthorne Effect
 Employees worked harder if they received added attention, if
they thought that managers cared about their welfare and
that supervisors paid special attention to them.
 Test pointed to factors other than
illumination for productivity – relations
among the workers and between them and
their supervisors
 Approach emphasized satisfaction of
employees basic needs
 Style of supervision is an important factor
in increasing job satisfaction
 The human relations movement grew from
the Hawthorne experiment.

 Human relations approach proposed that

worker's needs, feelings and emotions
should be considered

 Theorists of Human Relations – Maslow &

McGregor
Systems Management Theory
 Developed in the 1920’s but approach was not used
in organisations until the 1960’s

 Regards the organisation as a system of

interrelated parts, a collection of subsystems

 The theory that an organization comprises various

parts that must perform tasks necessary for the
survival and proper functioning of the system
Four Parts of System Management
 Inputs – the people, money, information, equipment,
and materials required to produce an organization’s
goods or services.

 Outputs – the products, services, profits, losses,

employee satisfaction or discontent, and the like that
are produced by the organization

 Transformation Process – the organization’s

capabilities in management and technology that are
applied to converting inputs into outputs

 Feedback – information about the reaction of the

environment to the outputs that affects the inputs
The Organisation as System
 Contingency Management Theory
 Developed in the late 1960’s

 The theory based on the premise that managers’

actions/approaches should vary according to the
individual, task to be performed, technology used and
the external environment that the organization is in
 Summarized as an “it all depends” device

 Encourages managers to stay flexible

 No general principles of management that can be

applicable to all situations, what is best will depend on
variables
Discuss the different types of management theories
Classical Management Theory
Human Relations Approach
Systems Management Theory
Contingency Management Theory

What do you think is the best management Theory?

Why?
 Summary
Scientific Management
• Job design
• Hiring & Training
• Incentives

Administrative Management & Bureaucratic Management

• Formalized structure
• Division of labour

Human Relations Approach – If workers needs are satisfied = more productive

• Social work environment
• Leadership
• Working conditions

Systems Theory
• Organisations inputs and outputs are interconnected
• Inputs get transformed into outputs

Contingency
• Flexible, depends on various factors
• More responsive to now rapidly changing environment
 SUMMARY
• Scientific management theory is important because its approach
to management is found in almost every Industrial business
operation worldwide. Its influence is also felt in business during
planning, process design, quality control, cost accounting and
ergonomics.

• In contrast to scientific management, administrative

management provides a more general theory of management

• Workplaces are social environments within them, people are

motivated by much more than economic self-interest
 Homework / Activity

 Look at and compare :

Classical theory vs Human Relations approach